Each payment experience you make as a consumer—mortgage, credit card, and car payments, to name a few—could show up on your personal credit report.
The same goes for your business in regards to your business credit report. Payments to suppliers, loan payments, commercial lease payments, auto payments, are allpayment experiences that could be reported and end up on your business credit file. Data warehouses, like the Small Business Financial Exchange (SBFE), along with business credit reporting agencies collect the information that then shows up on your report and affects your business credit score.
What does the Small Business Financial Exchange (SBFE) do?
The Small Business Financial Exchange serves as a data exchange for small business credit information. Established in 2001, it is member-owned by small business lenders—think of it as a membership-only Goodwill for small business data. Members of the SBFE contribute data on small businesses they work with, and in exchange they can access credit reports generated by SBFE certified vendors. The SBFE calls this the “give-to-get” exchange.
SBFE membership is open to those that originate small business financial obligations, own the paper related to small business financial obligations, or service receivables for financial obligations. For example, banks, credit card providers, alternative lenders and leasing companies can all be SBFE members. Those that become members commit to submitting account information, both negative and positive, on businesses they work with to the SBFE Data Warehouse each month.
Why does the SBFE matter to my business?
If you apply for credit or financing with a financial institution or company that is an SBFE member, chances are they will purchase a credit report that includes SBFE data provided by other members. If you’ve paid on time, this business credit history can help your business get approved for financing. If you have bad business credit history, you may not be eligible for the best/lowest rates. You may be eligible for attractive options such as small business bank loans or equipment leases. (Learn more about how to report to business credit bureaus)
What information does the SBFE have on my business?
The SBFE stores a number of data points on businesses. Information it might collect on your business includes:
- Business identification information, like your business’s name, address, DUNS number, NAICS code, and EIN.
- Positive payment information—bills you pay on time or early to lenders, suppliers, vendors, and business partners, plus your credit limits on those accounts
- Negative payment information—bills you pay late to lenders, suppliers, vendors, and business partners, plus your credit limits on those accounts
- Credit card payment history
- Payment information on your business’s lease payments
Does the SBFE create business credit scores?
The SBFE makes it clear on its website that it does not create or sell credit reports of any kind. It has, however, authorized a small group of vendors to create credit products such as credit data products. SBFE certified vendors include Dun & Bradstreet, LexisNexis Risk Solutions, and Equifax. You can learn more about how to build business credit here. (Learn more about business credit reports and scores here.)
Who can access the data that the SBFE stores on my business?
SBFE data is available to SBFE members only, and SBFE information is available for credit risk assessment and not for marketing purposes.
It’s important to note, however, that business credit reporting agencies are not covered under the same federal law that covers personal credit data. Personal credit data is protected under the Fair Credit Reporting Act (FCRA), which limits access to your credit data and requires some parties, like employers, to get your permission before accessing your credit information.
Business credit and lending is not covered under the FCRA. Generally, this means that anyone can access your business’s credit information anytime they want, and they don’t need your permission to do it.
Thus, if an SBFE member wants information on your business, or a report from certified vendors, they do not need your permission to obtain such reports. (However, in the case of SBFE data, only members have access to that information.) This is why it’s important for businesses to know what information is in their business credit reports—any lender you consider working with now or in the future can gain access to this information.
Additional Business Credit Resources:
https://wp.staging.nav.com/resource/what-is-business-credit/
https://wp.staging.nav.com/blog/3-vendors-will-help-build-business-credit-22833/
https://wp.staging.nav.com/business-credit-reports/experian/
https://wp.staging.nav.com/blog/ucc-filings-and-business-credit-scores-8189/
https://wp.staging.nav.com/blog/where-can-i-get-my-dun-bradstreet-rating-30647/
https://wp.staging.nav.com/blog/check-your-naics-codes-8163/
This article was originally written on December 11, 2017 and updated on January 30, 2020.
What happens when D&B doesn’t get the information right, or doesn’t show a business line of credit that my business has maintained for several years? Who do I contact to make that right? And what will it likely cost if anything
As far as your line of credit goes, not all accounts will report to all commercial credit agencies. Since it’s a voluntary system it’s not required that they report to Dun & Bradstreet. If your line of credit is through a traditional lender (like a bank) it may be reporting through the Small Business Financial Exchange (SBFE) and you may not see that when you check your own credit. However, I do recommend you also check Experian and Equifax to see if that account shows up on other reports. You can view those with a free Nav account.
If you’ve found a mistake on your report, you don’t have to pay to dispute it. If you’re viewing it through Nav you can go through the Disputes tool instructions. Reach out to our customer support team if you encounter issues. If you’re checking it through a different service you’ll need to follow their instructions.
I hope this helps!